Looking for something to inspire my blog writing today, I came across this article on the BBC website – Energy efficiency’ Green Deal launched by government – and the bit that caught my eye was this excerpt:-

The costs

Consumers taking out Green Deal loans will have to repay them at a maximum rate of 6.92%, according to the Department of Energy and Climate Change.

Compared to a standard home loan rate, that is relatively high.

On top of the loan, householders will have to pay a £63 set-up charge, and a £20 a year annual fee.

On a loan of £5,000, the overall rate that is repayable is just under 8% over 10 years, or 7.7% over 25 years.

The government argues that such rates are comparable to the best High Street rates for long-term unsecured loans.

The amount that anyone can borrow will be capped at £10,000.

Later on in the article it said :- But he acknowledges that in some cases, the cost of the loan could be more expensive than the savings gained.

So, would you want to take the risk?

At least with solar PV systems the pay back is still around 8 years – that is when you invest in a PV system the money that you use to install is paid back with 8 years. If you can afford to install such a system you can get a better rate than leaving your money in the bank and it carries on for 25 years so you can make some reasonable money.

Not so with this deal, you may make money but you may not, you pay a high rate of interest (remember that the Bank of England rate is still 0.5% at the time of writing) and when you come to sell your house, what happens then – you sell the house with debt attached – not a good solution methinks – what do you think?